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The MaineCare black hole

Here is a fact that is simply inarguable: Maine hospitals are owed $450 million.

Here is another fact that is inarguable: That debt was caused by an expansion of MaineCare, which is Maine’s version of Medicaid, without accompanying state resources devoted to paying for the additional coverage.

Even the most enthusiastic supporters of MaineCare expansion have to concede that point. Under Gov. John Baldacci, more Mainers were put on MaineCare, and there was no corresponding funding mechanism to cover the exponential increase in cost.

Democrats have been arguing that the debt is not very important and that the MaineCare expansion was justified despite the growing debt.

While their problems are unquestionably larger than debt, the state does owe the hospital roughly $67 million, so it’s hard to argue that Maine Medical could have more easily withstood its shortfall were the state responsibly repaying its liabilities.

Yet after dismissing the damaging effects of this debt for the entirety of Gov. Paul LePage’s term, Democrats seem to have suddenly come around to the importance of paying back the debt.

But there is, of course, a caveat.

You see, the newfound Democratic motivation for paying back the hospitals is not really about paying the hospitals. Rather, it is a faux policy goal of the left, adopted only to use as a wedge and bargaining chip to, you guessed it, expand MaineCare once again.

In other words, they want to pay back the debt, so long as the governor and Legislature authorizes them to strangle future state budgets under the crushing weight of entitlement spending and in all likelihood burden hospitals with more debt in the future.

Seriously think about this for a minute. Essentially, this situation would be akin to you approaching a credit card company where you owe $46,000 dollars and attempting to say something to the effect of, “Well, I will repay you, so long as you raise my credit limit because I plan on buying a whole lot of stuff next week.”

Most people understand why this isn’t exactly the best idea.

That money is owed to hospitals. Period. It needs to be repaid, and that repayment should not be contingent on additional obligations by the state.

But were you to listen to Democrats argue their side, you would think you could have your cake and eat it, too. To the left, there are no hard policy choices, no difficult decisions to make or priorities to keep. To them, such as my fellow columnist David Farmer, they’ve somehow already won this argument, and anyone suggesting the plan is folly doesn’t recognize just how wonderful the whole plan is. Says Farmer:

“Despite the fact that it’s 100 percent federally funded, would save the state $690 million in the next 10 years and change lives for the better, some Republicans – not all, mind you – have tried to hedge their position.”

First of all, that statement is patently untrue. Federal reimbursements start at 100 percent, but they most certainly do not stay there. The 100 percent figure is covered from 2014 through 2016, phasing down thereafter. The state is, indeed, going to be on the hook for additional disbursements to cover the new enrollees.

But, regardless, how often have you heard an argument like this made? Has it ever passed the smell test?

We have heard “this will save us money over the next several years” for virtually every Democratic spending priority in both Augusta and Washington for the last 30 years, and it has never once been true. And we all know it.

When you commit yourself to paying a great deal more for something, you are going to spend a great deal more money. Claims that spending money actually saves money are always clever accounting gimmicks meant to placate opponents of additional spending, and those savings never materialize.

And frankly, just because the federal government is going to be paying a certain amount for new enrollees shouldn’t make me any happier than if the state was. Those expenditures come from taxes collected from you and me, so more federal expenditures mean more costs passed down to you and me.

There is no such thing as a free lunch, ladies and gentlemen. The state got into trouble because it thought there was one, and it should not fall for the same promises again.

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About Matthew Gagnon

Matthew Gagnon, of Yarmouth, is the Chief Executive Officer of the Maine Heritage Policy Center, a free market policy think tank based in Portland. Prior to Maine Heritage, he served as a senior strategist for the Republican Governors Association in Washington, D.C. Originally from Hampden, he has been involved with Maine politics for more than a decade.
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Matthew Gagnon

Matthew Gagnon, of Yarmouth, is the Chief Executive Officer of the Maine Heritage Policy Center, a free market policy think tank based in Portland. Prior to Maine Heritage, he served as a senior strategist for the Republican Governors Association in Washington, D.C. Originally from Hampden, he has been involved with Maine politics for more than a decade.